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KIA3004 - Week 10 - Method Related Charges

The document discusses method-related charges in construction contracts. Method-related charges cover activities relating to the contractor's intended method of executing construction works, rather than direct quantities. They are inserted by the contractor into the Bill of Quantities and include items like site accommodation, services, plant, supervision, and labor. Method-related charges are divided into time-related charges paid out over time, and fixed charges paid upon completion. Common examples and the distinction between fixed and time-related charges are provided. Method-related charges provide advantages like reducing claims, adapting to variations, more equitable payment, and better cash flow.

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Arfan Maskey
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459 views15 pages

KIA3004 - Week 10 - Method Related Charges

The document discusses method-related charges in construction contracts. Method-related charges cover activities relating to the contractor's intended method of executing construction works, rather than direct quantities. They are inserted by the contractor into the Bill of Quantities and include items like site accommodation, services, plant, supervision, and labor. Method-related charges are divided into time-related charges paid out over time, and fixed charges paid upon completion. Common examples and the distinction between fixed and time-related charges are provided. Method-related charges provide advantages like reducing claims, adapting to variations, more equitable payment, and better cash flow.

Uploaded by

Arfan Maskey
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 15

1

Week 10
Method-Related Charges

KIA3004
Construction Management
& Technology
2

Lecturer Info

Ts. Dr. Saznizam Sazmee Sinoh


saznizam@um.edu.my
Room G112 (Block G, Level 1)
3

Course Outcomes
Continuous
No. CLO Exam
Assessment

Apply the contract strategy in selecting the best type of construction


1 17.5% 5%
contract to suit the type of construction
Manage the tendering process in the construction contract
2 administration and documentation, prepare contract evaluation and 17.5% 10%
variation and to make valid civil engineering claims
Apply the operational cost estimating technique and organize risk
3 appraisal for small projects incorporating the method-related - 15%
charges.
Apply the project planning technique and the Critical Path Method
4 (CPM) for construction project and theory of construction materials 35% -
and plant management.
4

Introduction
How much to charge for 1 packet of nasi lemak?

1 cup Rice RM1.00


1 Egg RM1.00
1 spoon Sambal RM0.50
1 spoon Anchovies RM0.20
5 slices Cucumber RM0.30

TOTAL RM3.00
5

How much to charge


for other stuff?

Cooking RM ?
Packaging RM ?
Transport RM ?
Marketing
RM ?
More importantly, how can
we QUANTIFY these?
6

These are quantity-based

1 cup Rice RM1.00 Cooking RM ?


1 Egg RM1.00 Packaging RM ?
1 spoon Sambal RM0.50 Transport RM ?
1 spoon Anchovies RM0.20 Marketing
5 slices Cucumber RM0.30 RM ?

These are method-based


7

Cooking RM ?
Packaging RM ?
Transport RM ?
Marketing
RM ?

Thus, we can say they are


METHOD-RELATED
CHARGES
8

Method-Related Charges
Definition:

An item in BoQ which covers activities relating


to the intended method of executing the
construction Works.

• Inserted into the BoQ by the contractor


• Is not directly related to quantity of work done
9

Engineer Expert in DESIGN

Contractor Expert in
CONSTRUCTION
METHODS
• Contractor has the final say to determine the method to
carry out the Works
• QS and Engineers may estimate the quantity of
materials required and the contractor will
supplement the BoQ with how much it costs to carry
out construction activities
10

CESMM3 & CESMM4 have over 40 items to include in the BoQ such
as
• Accommodation (offices, stores, canteen, etc.)
• Services (water, power, site transport, welfare, etc.)
• Plant and temporary works of many kinds
• Supervision and labour
• Contractor may also include items not listed in
CESMM
11

Method-Related Charges are divided into 2 basic types:


(But both are priced as LUMP SUMS in the BoQ)

Time-Related Charges Fixed Charges


Payments spread out over Paid upon completion of
time to complete Item Items
12

Example of commonly
included method related
charges
Observe the distinction
between fixed and time-
related charges

Why is item A330.2 wrong?


13

Method-Related Charges typically go


under Class A in CESMM3/4
14

Advantages of Method-Related Charges

• Reduce likelihood of claims


• BoQ can adapt better to variations and changes
• Contractor receives more equitable payment for
work done
• Better early cash flow especially to contractor
15

Next Lecture

Cost-Estimation and Risk Appraisal

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